Automobile financing in Pakistan continued its strong upward trend, rising for the 18th consecutive month and reaching a record Rs. 369.12 billion, even as the State Bank increased the policy rate to 11.5 percent in April.

Data from the State Bank of Pakistan shows that auto financing climbed from Rs. 359.5 billion in April and also crossed the previous peak of Rs. 368 billion, which was recorded in June 2022.

The sustained increase indicates that higher borrowing costs have not significantly slowed demand for vehicle loans. Market analysts believe many consumers still find current financing rates manageable, while banks and auto companies continue offering competitive installment plans that support demand.

Growing interest in newly launched hybrid and electric vehicles has also contributed to financing activity. Rising fuel prices have pushed buyers toward more fuel-efficient options, further boosting demand for financed purchases.

On the sales side, cars, SUVs, pickups, and vans recorded 17,660 units sold in May, showing a 19 percent year-on-year increase, although sales were down 20 percent compared to April.

Overall vehicle sales during the first 11 months of FY2025-26 reached 183,704 units, marking a 45 percent rise compared to the same period last year.

Industry momentum is expected to continue in the coming months, supported by increased imports of semi-knocked down (SKD) and completely knocked down (CKD) kits by local assemblers, which nearly doubled to $1.877 billion during July–May FY26, compared to $949 million a year earlier.